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How about "broad brush" method for Non-Prop reinsurance reservig

S

Smith

Member
in Page 18, Chapter 23 of course notes, the method of broad brush, the applicaton towards proportional business have been stated well in detail, but respect of non-proportional business, not specified. Could you make up for overall knowledge?

thanks and regards,
 
The method is the same, for both proportional and non-proportional reinsurance. Just imagine you multiply the gross reserves by a percentage to get the net reserves

Of course, this is more intuitive for proportional reinsurance. For non-proportional reinsurance you would need to spend rather more time considering what that percentage should be.

You should have a think for yourself why that percentage would be difficult to estimate.

You should also look at Question 7 from September 2012.
 
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